Introduction

DeFi (Decentralized Finance) has been a rapidly growing theme in the cryptocurrency space. Although it is well known among the crypto natives, until today, it is still a very new concept to many retail investors and TradFi companies. One reason for this is that it is still very difficult to understand the underlying concepts of cryptocurrencies, let alone DeFi.

This is where Brokkr Finance comes in, aiming to offer an automated, secured, and simple portfolio-based investment protocol.. Brokkr provides an infrastructure to run investment portfolios that consist of strategies that automate the usage of DeFi protocols.

Portfolios & Investment Strategies

There will be many theme-oriented investment portfolios and individual strategies enabled by BROtocol. According to the user’s selection, the individual user investment would fall into either Secure Portfolio, Balanced Portfolio or Risky Portfolio accordingly.

Portfolios consist of multiple investment strategies that utilize existing DeFi protocols. Portfolios are like TradFi ETFs, but Brokkr’s portfolios consist of entire strategies, not just individual tokens. When the user invests in a portfolio, the investment is split into each strategy from the portfolio. By using a portfolio, a user diversifies the investment in case of underperformance of one strategy. Portfolios greatly simplify the investment process as they automate all manual steps, the user only decides on how much risk to reward is willing to accept by picking a certain portfolio.

Investment Strategies are the individual building blocks of above-mentioned portfolios. They are smart contracts that automate manual steps when investing in DeFi protocols and are created by the DAO and the community. They can be integrated into portfolios, used directly, or be integrated by third-party providers like XDEFI Wallet, or Kinetic Money.

Strategies are dynamically created based on market needs and are expected to be valid for 6–12 months on average.

Risk Factors and APY Goals are key indicators for investors to make an investment decision. Brokkr takes various factors into account to display the approximate risk involved in each portfolio, such as TVL, the protocol’s age, number of audits etc.

Example Portfolio 1 — Savings Account: Portfolio consisting of Strategies built around stablecoins. Stable yield without price exposure with various stablecoins strategies, by investing through various protocols with various stablecoins, like $UST, $USDC, $USDT.

Example 2 — Bluechip Yield: Portfolio consisting of Strategies that utilize the top Layer 1 coins.. Variable yield with a price exposure from the Top Layer 1 Bluechips coins, by investing through strategies that utilize bluechip coins, like $LUNA, $ETH, $BTC.

Revenue & Auto-Compounding Treasury

The Brokkr protocol — also called the “BROtocol” — has three key revenue streams, which are:

(1) Success fee on strategies

(2) Yield generated by the treasury’s investments

(3) Swapping fees from LP tokens.

These revenue streams essentially enable the increase of $BRO staking rewards and its floor price. Any value generated by BROtocol is captured in $BRO token and channeled to the treasury to ensure the protocol’s sustainability and longevity.

Treasury contains capital which is owned by protocol (Protocol-Owned-Capital, POC) with three main goals:

(1) Generate an endless stream of revenue ($BRO Forever Revenue) — this part of the treasury cannot be withdrawn and will be kept reinvested in strategies to generate infinite revenue and auto-compound the Treasury.

(2) Guarantee a certain $BRO floor price

(3) Incentivize $BRO stakers via staking rewards $bBRO — this part of the treasury contains withdrawable capital which can be withdrawn by stakers. This is a safety measurement to protect stakers interests against market volatility, by ensuring stakers always have an option to sell $BRO for a certain floor price to Brokkr.

Staking and Unstaking $BRO

Stakers lock $BRO in BROtocol to earn staking rewards — $bBRO and $BRO tokens. As BROtocol invests its assets in its own Brokkr Portfolios, which is leveraging up-to-date and appealing DeFi protocols, $BRO investors get exposure to various DeFi investments and strategies simply by buying and staking $BRO in the BROtocol.

Hence, Early supporters and long-term stakers would be able to get the most out of Brokkr. Long-term staking is also what makes the protocol healthy and sustainable.

Governance — Every $BRO staker is eligible to vote on protocol parameters and influence the direction Brokkr is heading to.

Protocol parameters that can be changed by the Governance. (Note that during the bootstrapping phase some parameters are adjustable only by the core team.)

An Unstaking option is always available to all stakers which comes with a 14 day unstaking period (with no additional staking rewards during this period). All previous rewards are claimed automatically once unstaking is done.

Bonding — POC, POL

For BROtocol sustainability, there are two types of bonding that help the protocol to acquire its own liquidity and investment capital. The bonding price is determined by $BRO current market price, $BRO emission rate from rewards pool and the depth of liquidity pool.

1. Protocol Owned Capital (POC) — Bonding Capital. Users sell Terra Stablecoin ($UST) directly to Brokkr for discounted $BRO tokens. This bonded $UST would be put to the Treasury as Forever Capital and invested in portfolios to generate more revenue.

2. Protocol Owned Liquidity (POL) — Bonding LP Tokens. Users sell $BRO-$UST LP Tokens directly to Brokkr for discounted $BRO tokens. These LP tokens would be put into the liquidity pool but are owned by the protocol. This is to ensure there is always sufficient liquidity in the trading pool.

Below diagram is the overview of BROtocol design as explained above:

March and April 2022 are the most exciting months for BROKKR Finance with upcoming IDOs.

(1) Platform : Brokkr Whitelist (We will have a link next week)

Date : March 30, 2022

Chain: Terra Network

Whitelist Sale will be available through Brokkr Whitelist NFTs. These NFTs are being given out through Brokkr community activities and to Brokkr’s early supporters. Read more about this phase on Brokkr’s medium.

(2) Platform : THORStarter (https://thorstarter.org/)

Date : April 1–4, 2022

Chain: Terra Network

For more information, follow THORStarter Twitter as IDO details would be published when the date gets closer.

(3) Platform : StarTerra

Date : April 5–8, 2022

Chain: Terra Network

Hop onto BROKKR Blog to obtain more information on how to participate.

About Brokkr

Brokkr is a decentralized investment protocol that enables the creation of investment portfolios made of strategies that combine the usage of various DeFi protocols. By cross-chain protocol aggregation and automation, Brokkr simplifies the investment process and displays it in an intuitive app interface. The protocol empowers crypto investors with DeFi powers.

More Information

Website: https://brokkr.finance/

Twitter: https://twitter.com/BrokkrFinance

Discord: https://discord.com/invite/CDNKYTDqTE

Telegram: https://t.me/Brokkrfeedback

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer

Qi Capital is a strategic investor in Brokkr. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Brokkr — The First-Class DeFi Investment for Retail was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Listen to this Qi Podcast episode:

Welcome to the Qi Podcast. My interview guests today are Simon and Jordan from Luart — a new all-in-one NFT platform built on the Terra blockchain. We will talk about the ongoing NFT trend and get to know their gamified NFT marketplace. Enjoy!

Follow QiCapital on Twitter: https://twitter.com/Qi_Capital
Follow Archon on Twitter: https://twitter.com/archon_0x
Follow Luart on Twitter: https://twitter.com/luart_io

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. Qi Capital website: https://www.qicapital.org

About Luart

Luart is the first NFT platform that brings a seamless, all-in-one experience to the Terra Ecosystem. Creators and LUNAtics alike benefit not only from participating in the expanding universe of Terra NFTs, but also as a user of Luart’s unique marketplace.

Website: https://www.luart.io/
Twitter: https://twitter.com/luart_io
Litepaper: Litepaper Link
Medium Blog: https://luart-io.medium.com/
Discord Channel: https://discord.com/invite/luart
Telegram Announcement Channel: https://t.me/luart_io

Disclaimer

Qi Capital is an early investor in Luart. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Qi Podcast #22: Luart — A Gamified All-In-One NFT Platform Built on Terra was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Listen to this Qi Podcast episode:

Welcome to the Qi Podcast. My guests today are — for the second time — members of the BNPL Pay team from Australia. I will be talking to them about what progress they have made with their uncollateralized lending protocol and explore some of the potential use cases that can be built on top of it. Enjoy listening!

Follow QiCapital on Twitter: https://twitter.com/Qi_Capital
Follow Archon on Twitter: https://twitter.com/archon_0x
Follow BNPL Pay on Twitter: https://twitter.com/bnplpay

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. Qi Capital website: https://www.qicapital.org

About BNPL Pay

BNPL Pay is a revolutionary DeFi protocol that brings uncollateralized lending to the blockchain space. The BNPL Pay protocol will bridge #DeFi lenders with #CeFi borrowers. starting with the BNPL (Buy Now Pay Later) sector. Learn more about BNPL Pay on https://bnplpay.io/

BNPL Pay Whitepaper: https://bnplpay.io/file/BNPL%20Pay_Whitepaper.pdf
BNPL Pay Medium Blog: https://medium.com/bnplpay
BNPL Pay Discord Channel: https://discord.com/invite/zuXGDP5NWx
BNPL Pay Telegram Channel: https://t.me/bnplpay

Disclaimer

Qi Capital is an early investor in BNPL Pay. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Qi Podcast #21: BNPL Pay — A Follow Up: The Road to Mainnet and Future Use Cases was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Considering the importance of the problem Edge Protocol is trying to solve, it is probably one of the most overlooked projects in the Terra ecosystem. Although there are many tokens in the crypto market, most are NOT productively utilized, meaning that they do not generate any revenue. While creating benefits for communities, protocols can utilize those assets instead of by creating their own pools on Edge Protocol. Hence, Edge Protocol is Terra’s first protocol to allow anyone to create customizable liquidity pools and markets for assets that allow users to perform multiple actions:

— Build bank operations on a platform

Edge Protocol provides protocols with the freedom to create lending mechanisms (e.g. margin trading, leverage yield farming) without the programming cost and time input.

— Create an alternative revenue stream for existing protocols/users within the Terra ecosystem

Any activities happening within the protocol-owned pool become a new source of revenue. For instance, the pool manager can lend a portion of their assets to users in return for interest. Unlike the case with other services like Compound, where the platform retains pool fees for operations, Edge allows users to manage and collect the fees fee directly.

— Allow protocols and DAOs to manage their treasury independently

Edge Protocol allows protocols to make use of their treasury tokens, allowing them to generate revenue from the treasury assets without selling them.

Other functions include:

— Enable long-tail assets and assets that mature to be listed.

— Borrow against yield-bearing assets

— Hedging to limit exposure to other assets (e.g., Delta neutral strategy)

— Leverage any asset

— Create micro-financial services

With over 160 projects expected to be launched on the Terra ecosystem next year, new markets will be needed to accommodate that many new tokens. However, some projects may find it initially difficult to list on an exchange due to the lack of liquidity. Besides, existing platforms expect ongoing fees in return for listing, and the approval process is often lengthy and costly. Edge Protocol changes this all by allowing protocols/users to create their own money markets with the revenue directly going to those creators. The project’s motto is “Create your own money market, build your own edge.” To get users and protocols involved, Edge Protocol utilizes community-based money markets with three main components, where each component has its own stakeholders.

A) Customised pool creation (for pool creators).

B) Pool marketplace (for traders, lenders, and borrowers).

C) Liquidation (for liquidators and liquidity providers).

A. Customised Pool Creation

Edge Protocol allows users/protocols to create a pool by listing any asset they want and customizing all parameters. They then can earn money through the market fee collected in their pool, which generally would have gone to third-party platforms. Pool parameters can include

• Oracle (pool creators can select the pool oracle)
• Asset listing parameters (e.g., long tail, maturity date, etc.)
• Risk parameters (users can select the level of risk they want to be exposed to (e.g., LTV threshold))
• A collateral factor (the percentage of collateral needed to borrow)
• A borrowing factor (e.g., set limits on borrowings)
• An interest rate model (select the target utilisation rate model that matches their purpose)
• The percentage of fees shared (select percentage of fees collected from transactions across your pool)
• A whitelisted contract (select whitelisted contract address for a specific group of people)

B. Pool marketplace

Edge Protocol is not a money market itself. Instead, it allows protocols to create money markets while giving non-pool creators permissionless access to those pools. People can access tons of pools easily through the Edge Portal, where they can trade, lend and borrow. Two types of pools will emerge with the help of Edge Protocol. The first one is the public pool, which offers general features that can be found across many other platforms such as Compound, Aave, or even Mars. The latter will be a private pool created to satisfy users’ needs with specific requirements (e.g., bootstrapping and small group lending).

C. Liquidation

Stability Reserve

When the LTV for particular assets exceeds a certain threshold in the traditional money market, the protocol will liquidate the collateral required by swapping it through a DEX. However, liquidating externally can be challenging in a permissionless context due to the lack of liquidity on DEXes and price impact. Hence, since Edge protocol allows people to list any asset in the created pool in a permissionless way, there is an inherent risk coming from the volatile behaviour of some assets and lack of liquidity. To mitigate those risks, Edge deliberately designed a liquidation mechanism. The liquidation mechanism is a stability reserve designed to liquidate assets by swapping them with the underwater collateral. Liquidators stake their assets in the stability reserve to hedge for risk and receive a portion of the lender’s profits in return. Furthermore, since all pools powered by Edge protocol function independently and are not interlinked in any way, any risks introduced into a pool by the pool creator, either through the assets allowed or the pool parameters, are solely contained within the market with no chance of affecting others.

3 Phases of Pool Creation

With the ultimate goal of becoming a leading “permissionless” pool creation platform on the Terra ecosystem, the Edge Protocol plans to expand its services to the community in three phases:

1st phase — Protocol-owned money market

2nd phase — Community-owned money market

3rd phase — “Be your own bank”

The first phase, as the name suggests, is mainly targeted at protocol-owned money markets, in which Edge Protocol will be partnering up with protocols and dApps built on Terra to bring this idea to fruition and show the world the benefits associated with such a product.

To summarise, thanks to Edge Protocol, money markets will become more decentralized. Protocols will have much more flexibility when listing their assets, while users have access to a broader range of services, thus boosting their earning potential. In addition, through Edge Protocol’s front-end, anyone can become a money market owner without needing to build the market themselves from scratch. In the future, the protocol will continue expanding. There are, at the moment, three stages in the pipeline, as can be seen in the illustration above. Their plans are very ambitious, and if they succeed, Edge Protocol could become a major player within the Terra ecosystem.

More Information

• Edge Protocol Twitter: https://twitter.com/EdgeProtocol
• Edge Protocol Telegram: t.me/edgeprotocol

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and Defi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer

This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Edge Protocol — Create Your Own Money Market, Build Your Own Edge was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Listen to this Qi Podcast episode:

Welcome to the Qi Podcast. I am Archon and today I am interviewing the PlayNity team. PlayNity is a blockchain-gaming-focused DAO that brings together all stakeholders of Play-to-earn games such as Axie Infinity. How they do this — we find out in this episode. Enjoy listening!

Follow QiCapital on Twitter: https://twitter.com/Qi_Capital
Follow Archon on Twitter: https://twitter.com/archon_0x
Follow PlayNity on Twitter: https://twitter.com/play_nity

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. Qi Capital website: https://www.qicapital.org

About PlayNity

Starting on the Terra Chain and the Binance Smart Chain, PlayNity is approaching investors and players community on the Play2Earn growing trend in the metaverse space. PlayNity delivers the possibility to earn ROI from Play2Eearn games without engaging in all in-game process for investors and delivers for players the possibility to play P2E games risk-free without any capital requirement.

Website: https://playnity.io/
Twitter: https://twitter.com/play_nity
Telegram: https://t.me/PLAYNITY
Discord: https://discord.com/invite/playnity
YouTube: https://www.youtube.com/channel/UCGeFauQQyNBfqsopbZU2NMw

Disclaimer

Qi Capital is a strategic investor in PlayNity. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Qi Podcast #20: PlayNity — A Blockchain Gaming DAO To Unite All Play-to-Earn Stakeholders was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Listen to this Qi Podcast episode:

Hello and welcome to the Qi Podcast. I have the honor to welcome Sawit Trisirisatayawong — General Manager at Nebula Protocol — today in this episode. He will tell us more about the dynamic ETF protocol he and his team are building on Terra and how they are making the lives of investors easier with it. Enjoy listening!

Follow QiCapital on Twitter: https://twitter.com/Qi_Capital
Follow Archon on Twitter: https://twitter.com/archon_0x
Follow Sawit on Twitter: https://twitter.com/tansawit
Follow Nebula on Twitter: https://twitter.com/nebula_protocol

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. Qi Capital website: https://www.qicapital.org

About Nebula Protocol

Nebula Protocol is a revolutionary DeFi solution built on top of the Terra blockchain that allows users to create customized dynamic ETFs (clusters) and indices that mimic the movement of multiple (synthetic) crypto assets.

Telegram: https://twitter.com/nebula_protocol
Twitter: https://twitter.com/nebula_protocol

Disclaimer

This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Qi Podcast #18: Nebula Protocol — Building Dynamic ETFs on the Terra Blockchain was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Since the beginning of this year, Terra’s Luna coin has grown more than 50x and still has a great future ahead, given the rising demand for stablecoins and financial services in the Defi space. The best way to think of the Terra-Luna network is as a fully digital, decentralized financial institution with its own central reserve. Its customers can earn interest on their assets, spend them through its payment system, and even invest in synthetic stocks. A rich ecosystem has already been built on top of the Terra-Luna ecosystem. So in this article, we will first introduce Terra, followed by an introduction to12 promising projects built on top of it in alphabetical order.

Introduction

Terra is a smart-contract enabled blockchain adopting the Cosmos software development kit (SDK) and Tendermint Proof-of-Stake (PoS) consensus mechanism. It focuses on payment processing and stablecoins to solve the problem of the price volatility of cryptocurrencies. Unlike Tether (USDT), an off-chain collateralized stablecoin backed by non-crypto currency bank deposits, Terra’s stablecoins (e.g., UST) are algorithmic stablecoins that are not collateralized but instead backed by its native LUNA token. As a result, its unique dual coin system offers both price-steadiness and high growth earnings potential. For example, when demand for Terra UST increases UST>$1 (decreases UST < $1), LUNA token holder can swap $1 worth of LUNA (UST) for UST (LUNA), thus making a profit. However, once the supply of UST (LUNA) increases, the price returns to $1. Thus, the whole process of mining LUNA (UST) in exchange for UST (LUNA) to reduce price volatility is called seigniorage.

Terra’s Chai payment system has already millions of users and processes billions of dollars in transactions each year. It is expected to grow as the project expands to countries beyond South Korea, such as Singapore, Thailand and Taiwan. Terra’s decentralized, permissionless and interoperable features make it an ideal blockchain platform to support a future digital economy. Furthermore, as the demand for cryptocurrency day-to-day transactions increases and the platform widens its geographical coverage, we believe that the Terra-Luna ecosystem will continue to expand rapidly.

Terra already has a large community of solid supporters/believers, which drive its growth. It offers a comprehensive ecosystem and is well-positioned for the future with unique projects, such as Anchor, Mirror and other promising protocols that we will discuss here. Together they form a well-rounded financial ecosystem, which attracts many new users and benefits them by offering high and stable yields.

Astral

One of the most important problems in the Defi sector is the lack of convenient payment and shopping mechanisms for merchants and customers. Astral solves this issue by connecting the outside world of buyers with merchants via the Terra ecosystem. The platform allows customers to pay for services with cryptocurrencies in an easy, quick and inexpensive fashion. Transaction completion time is less than ten seconds, and users do not get charged card processing fees. Furthermore, customers can receive rewards and special discounts.

Astral allows firms to open a new revenue stream from a business standpoint by accepting digital currencies and not just cash payments. Furthermore, the integration of merchants with its platform is quick and easy. Merchants can accept Terra’s stablecoin through their eCommerce content management system and process payments for users with lower fees and quicker settlement times than traditional payment gateways.

Twitter: https://twitter.com/astral_money

Astroport Finance

Astroport is a next-generation AMM, where travellers from all over the Terra galaxy (Mirrans, Terrans, Anchorians, Martians, Levanians and more) meet to trustlessly exchange assets. The protocol has been developed and built by an experienced high-class team consisting of Delphi Digital Labs, IDEO CoLab Ventures, Terraform Labs and Astroport builders (the “Astroport Joint Venture”). Unlike traditional AMMs that offer only one type of liquidity pool to suit the needs of all investors, Astroport takes it to another level by considering the needs of all liquidity providers and offering more flexibility and higher potential profitability. For instance, a traditional DEX (e.g., Uniswap) offers only Constant Product Pools, while Astroport offers three types of LPs. It provides Constant Product Pools (ideal for pairs with high volatility); Stableswap Invariant Pools (great for tokens with exchange rate 1:1, such as stable coin pairs); Liquidity Bootstrapping Pools (great for new tokens (long-tail assets)).

In addition, the protocol offers a unique feature called ASTRO Generators that enables simultaneous dual farming of ASTRO tokens and the governance tokens of any other community so that users are not faced with the decision to choose one over the other and can double their rewards. The project also provides outstanding security. Unlike many exchanges that use instantaneous pricing, Astroport applies time-weighted average prices (TWAPs) that are effective at providing close to real-time price information while making system hacks less likely. Astroport will also offer a unique user interface and user experience that meets the needs of traders, LPs (e.g., it will offer historical pool statistics), and the community. The protocol’s backward compatibility with Terraswap message formats will further enable simple integration with existing projects.

With the growing demand for Terra tokens, the ecosystem needs a new programmable decentralised exchange, one that’s extensible and community-owned, to meet users’ growing needs. Astroport offers just this.

Twitter: https://twitter.com/astroport_fi

BrokkrFinance

Brokkr’s goal is to make DeFi investing accessible to everyone. They intend to be a one-stop platform for all types of investment services. Initially, this will include synthetics, saving, lending, borrowing, staking and ETFs, but their offering will expand in the future. A synthetic asset is a tokenized derivative that mimics the value of another asset. Imagine that someone wants to trade $RUNE or $LUNA without holding the asset itself. Instead, one can trade their synthetic alternative, which tracks the underlying asset’s price using data oracles. Thorchain’s Liquidity Pools will fully back synthetic assets powered by Brokkr. They will possess the same level of security and will be redeemable 24/7.

Brokkr will also allow optimized automated investing in DeFi instruments according to the user’s risk appetite. For instance, it will offer a “low-risk” investing strategy that combines the anchor protocol and the mirror protocol to yield 40% stable interest. Furthermore, Brokkr will offer a ~20% yield for L1 assets such as Bitcoin and Ethereum. Moreover, since the user is only exposed to the underlying asset, there is no impermanent loss. In addition, with Brokkr, you will also be able to use your synthetic assets as collateral for lending and borrowing while your loans get repaid automatically.

Brokkr will also offer ETFs (exchange-traded funds). It is a basket of crypto assets traded between users. Not only does it provide the benefits of individual assets (e.g., growth potential), but it also offers a way to reduce idiosyncratic risk through diversification. The Thorchain network powers Brokkr’s synthetics assets, hence transaction fees and speed are inherited from Thorchain. Thanks to that, each transaction costs only 0,02 $RUNE, and transactions take only ~5 seconds, making trading super-fast!

Brokkr will be integrated with Terra and the Mirror protocol to give users access to synthetic stocks with crypto. Hence, thanks to Brokkr, you will access Thorchain services and Mirror synthetic stocks from one app. It will get even better once Thorchain synthetics get connected to IBC chains, and with the help of the mirror protocol and Terra, you will be able to lock BTC in long farm stocks. Lastly, Brokkr will be controlled through the Brokkr DAO with a $BRO token that will enable all token holders to help govern Brokkr and benefit from its activities.

Twitter: https://twitter.com/BrokkrFinance

Levana Protocol

Levana protocol (“Leverage any Asset”), thanks to a mechanism called the “Leverage Capsule” that simplifies and automates the leveraging process, allows investors to increase exposure to assets for a discount price. Levana protocol utilizes the Mars protocol and Terraswap in the following way.

A) Deposit $Luna into Mars protocol in exchange for $maLuna

B) Use $maLuna to borrow $UST

C) Convert $UST to $Luna via Terraswap

D) Add new $Luna to existing $Luna balance within Mars Protocol to borrow more $maLuna

E) Repeat the process until desired leverage is achieved.

The Levana protocol expands and complements the Terra ecosystem. Together with other protocols that focus on mirrored assets (Mirror protocol), high & stable yields (Anchor protocol), money markets (Mars protocol), etc., they form a comprehensive financial ecosystem. Since Terra already has a rich ecosystem with many dAPPs built on top, it provides excellent conditions and the needed support and community for the Levana protocol to grow. Levana protocol’s first product, the Levana Leverage Index (LLI) token ($Luna2x), is currently under audit and is expected to launch soon. The token provides 2x price exposure to the $Luna token. E.g., if $Luna goes up by 20%, the holders of the $Luna 2x-LLI token make almost 40% profit. On the other hand, if the market is down, Levana protocol introduced an auto-rebalancing mechanism that drastically reduces liquidation risk.

The Levana protocol has an ambitious roadmap, with perpetual swaps and options expected to be launched in the future. Besides, it also plans to offer value to other ecosystems via cross-chain settlement. The Levana protocol has a fantastic team with many years of industry experience. It is also supported by Delphi Digital, a team that has worked on numerous interesting projects, such as the Mars Protocol. A large percentage of tokens are allotted to the Levana_protocol community and treasury (50%), and the team and investors are subject to a lock-up period of 12 months. With the launch of Columbus 5 on the Terra network, we believe that the Levana protocol and its users can significantly benefit from it.

Twitter: https://twitter.com/Levana_protocol

Kujira

Lending against your collateral is a common practice in the Defi space. Anchor protocol alone has a total borrowing volume of 1.2bln. If a loan surpasses 60% of its LTV on Anchor, the borrower’s collateral gets liquidated, which is likely when prices fluctuate significantly.

For example, assuming that Bob has 100 bLunas as collateral at $50/bLuna, he can borrow up to 2500 UST at an LTV of 50%. However, if the price of bLUNA drops to $40, Bob’s position will break the 60% LTV limit. In this case, the contract partially/fully liquidates the 100 bLUNA collateral. Helmut submits a bid to obtain Bob’s collateral at a discounted price, which is then converted to UST to repay Bob’s loan. The difference between the real price and Helmut’s price is what we call premium. The lower the premium, the higher the price that Helmut needs to pay.

Before, the liquidation process ran on 1st-come-1st-serve. Let us say that a greedy bot is only willing to accept a 10% premium for Bob’s 100 bLUNA collateral, while Helmut is willing to accept 5 %, then regardless of their offer, the greedy bot will always win due to its speed. However, thanks to Kujira’s ORCA protocol, this is not the case anymore. With the help of its simple and intuitive UI (https://orca.kujira.app), you can choose a premium, and the system takes care of the rest for you.

When liquidation occurs, assets are liquidated in order from the lowest to the highest premium (order book style) and split evenly across users bidding at the same premium while giving bots no advantage. Not only does this mechanism make the market fairer for Helmut and more competitive, but it also offers better incentives to Bob, who would have otherwise thought twice before borrowing. Moreover, to further incentivise borrowers, they are compensated for losses with airdrops. Once Helmut wins the bid using Kujira’s ORCA protocol, he can then sell his discounted Luna for an immediate profit in the market, regardless of the market conditions. Hence, such a strategy can be pretty effective throughout bear markets when fewer outside options exist.

The ORCA protocol generates revenue from liquidations and fund withdrawal, which then is allocated into a $KUJI liquidity pool. The system is so built that when paying fees in $KUJI, users enjoy 50–90% discounts on the UST value, which incentivises them to own $KUJI. In addition, Kujira’s ORCA protocol will also offer $KUJI staking rewards for allocating assets into the KUJI-UST pool. Note that the ORCA dApp is only one of many Kujira projects. The team has a very ambitious roadmap with many upcoming projects. In addition to ORCA, they are already working on other projects, including Beluga, which allows users to send any CW20 token on Terra to multiple addresses simultaneously in one transaction. They also plan to make all Kujira apps cross-chain compatible.

Twitter: https://twitter.com/TeamKujira

Mars Protocol

Mars Protocol is a revolutionary credit protocol that utilizes dynamic interest rates and smart-contract-to-smart-contract (SC2SC) lending to provide the best possible user experience. While Anchor protocol provides one of the industry’s most secure and highest yielding savings platforms, the Mars protocol focuses on providing high-yielding lending and borrowing services, something that is missing in the terra ecosystem. In addition, Mars protocols enable Terra native assets (mAssets, ANC, MIR) to be borrowed and used as collateral, thus offering better benefits to lenders and borrowers.

While many existing protocols offer inflexible and fixed IRs, the Mars protocol introduces a dynamic interest rate model that reacts to changing market conditions without a governance proposal and thus can offer better returns. Furthermore, SC2SC lending enables borrowers to borrow assets from the LP without collateral. E.g., instead of depositing both assets to the, e.g., MIR-UST LP, the user only needs to provide $MIR (without an equivalent in UST), hence generating 2x exposure/higher earnings potential.

To ensure the security and stability of the Mars protocol, xMARS holders are responsible for governance and insuring protocol risk in return for receiving a share of the protocol’s revenue. As a result, credit protocols such as Aave and Compound have performed exceptionally well in the existing Defi ecosystem, reaching billions of dollars in market caps.

Twitter: https://twitter.com/mars_protocol

Nebula Protocol

The Nebula protocol is a revolutionary Defi solution that allows users to create customized dynamic ETFs (clusters) and indices that mimic the movement of multiple crypto assets. A crypto ETF (exchange-traded fund) is a basket of crypto assets traded between users on a decentralized/centralized platform. Not only does it provide the benefits of individual assets, but it also offers a way to reduce idiosyncratic risk through diversification. A simple way to picture it is: If someone puts all their eggs in one basket, they put all their effort or resources into doing one thing so that, if it fails, they have no alternatives left. The keyword here is diversity; do not invest all your money into one asset. One of the differences between ETFs and dynamic ETFs is that the latter can switch exposure between multiple asset classes depending on the market environment. E.g., the community may prefer stablecoins during bear periods and project tokens during bull markets. Another interesting feature of the Nebula protocol is that it allows rebalancing using almost any methodology. For instance, one can rebalance crypto assets using parameters such as market cap, number of Twitter followers, etc. The community votes on the composition of each cluster and the rebalancing methodology behind it, thus making the Nebula protocol a genuinely decentralized, fair and efficient solution. While investing in traditional exchange-traded products (ETPs) is often managed by a handful of players and regulated by central authorities, the Nebula protocol is fully decentralized, thus allowing investors to be more creative than ever when producing ETPs. Here is an example of a Nebula protocol index composed of only Terra tokens:

“Terraforming” Index

• Gain exposure to the Terra ecosystem.
• Assets: LUNA, MIR, ANC, MINE
• Weights: dynamically rebalanced by fully diluted market capitalization.

We strongly believe that the Nebula protocol will incentivise traditional investors to enter the DeFi sphere, thus bridging the traditional and decentralised financial markets. Dynamic ETFs will be one of the biggest financial products in crypto in the near future, so we strongly suggest keeping an eye on the Nebula protocol, as it provides just that. Moreover, like other protocols in this article, it is supported by one of the most powerful and promising ecosystems, namely, Terra.

Twitter: https://twitter.com/nebula_protocol

Prism Protocol

Typically, to receive rewards and airdrops, one needs to place their LUNA token into a vault for a no. of days, which means that they become illiquid for that period. Alternatively, one can, e.g., generate bLUNA and then use it as collateral to take loans, provide liquidity, etc. However, Prism protocol enables you to do both simultaneously, something that has not been done in the Terra ecosystem before.

When one deposits their token into a prism_protocol vault, they will get a collateral token CT in return. CT can then be split into its two underlying assets, the principal token PT and the yield token YT. These new assets allow users to separate and isolate different risks. For example, an athlete who is good at running and long jump cannot participate in two competitions simultaneously. Rather than having one athlete, one would prefer to have two to increase the chances of winning. Similarly, a token can be split into two, with each one performing a different function. Here, the yield token is responsible for earning yield, airdrops, and other perks. The principal token is responsible for keeping the asset liquid so that one can borrow, trade, and provide liquidity. The Prism protocol empowers users with new opportunities by creating a new marketplace to trade these Principal & Yield Tokens. As there are too many use cases of those tokens, we will not list them here. Instead, we suggest taking a look at the litepaper:bit.ly/3CTfCN6.

Initially, Prism protocol will launch PRISM v1.0. It will use Luna as collateral and create a perpetual YT (yLUNA) and a perpetual PT (pLUNA), perpetual meaning that it has no maturity date. Furthermore, it will allow minting, staking, liquidity provision, trading, burning and redeeming. In the latter stage, Prism protocol will enable fixed-term contracts in addition to their existing perpetual contracts with 1,3,6,9 and 12-month terms. Moreover, they are also planning to add more tokens that can be used as collateral, such as ETH, SOL, ATOM and DOT.

The Prism protocol decided to build its project on the Terra network because of the UST token and its genuinely decentralized nature. Other stablecoins are often exposed to multiple risks, including regulations, mismanagement of collateral, etc. Their team consists of experts with many years of experience working on the trading floors of blue-chip financial institutions in the fixed income markets. Their high degree of expertise and the support of Terraform Labs provides strong foundations for future development.

Twitter: https://twitter.com/prism_protocol

Random Earth

As the Defi market develops, NFTs begin to play an increasingly more important role in the ecosystem. However, the existing environment for NFTs has many problems. For instance, existing AMMs often offer limited trading options concerning non-fungible assets. Randomearth aims to change that by bringing decentralised limit order books to Terra and allowing users to trade anything from $UST to Galactic Punks’NFTs.

Randomearth will support various products, including Galactic Punks NFTs and Levana protocol’s Evolutionary NFTs. Projects can also build on top of their infrastructure. Examples of projects powered by Random Earth include Sigma Finance and the Prism protocol. Building a marketplace on top of Randomearth’s core infrastructure has many advantages. For example, it supports fractional NFTs, un-collateralised bidding, arbitrary asset auctions, etc.

• Fractional NFTs

Fractional non-fungible tokens (F-NFTs) are the newest craze of the crypto art world. They democratise owning a unique piece of art by allowing anyone to own a smaller piece of it.

• Uncollateralised Bidding

Randomearth bids are stored off-chain (e.g., on Anchor protocol), and as a result, one can broadcast only their intention to purchase an NFT (with no gas cost). Assets need only to be deposited into Random Earth at the settlement date when an auction closes.

• Arbitrary Asset Auctions

Randomearth offers Arbitrary Asset Auctions. It allows users to place orders in whatever units they desire. For instance, someone can bid in $aUST. Thus $UST never has to leave Anchor_protocol even at settlement.

Executing orders on Randomearth costs half as much gas as swapping on traditional AMMs. Furthermore, since orders are generated and stored off-chain, users can expect auctions to cost no gas at all. The most valuable NFTs will be backed by solid intellectual property (like NBA Top Shots or celebrity fan NFTs). Randomearth is building partnerships with artists, entertainers, and content creators to launch IP-backed NFTs on their platform. Randomearth’s NFT Marketplace will offer first-class login support through Google/Facebook/Twitter OAuth, while Terra wallets are generated behind the scenes. This way, anybody (even a person with no crypto experience) can engage with content on their platform.

On Randomearth, NFTs will be used primarily to foster fan engagement. We expect creators to want to build long-term relationships with their fans beyond the initial NFT sale. Hence, they intend to build Random Earth into a social platform with gamification via NFT rewards. Randomearth plans to utilise Wormholecrypto’s cross-chain bridge to purchase and transfer NFTs across multiple blockchains, including Terra, Ethereum, Solana, and Binance Smart Chain. Randomearth also plans to integrate with vendors to enable fiat payments on their platform. Hence, cash can be used to purchase NFTs, and if one chooses, he or she will not need a crypto wallet to hold their assets.

Twitter: https://twitter.com/randomearth_io

Spar Protocol

There are two types of participants in the Spar protocol: investors and fund managers.

From an investor’s perspective, it offers passive investment opportunities with more control and exposure to higher rates of return with the minimal input of time. Spar protocol investors can scan through a list of pools on the platform and select one or several with the most attractive risk/returns for their investment appetite. In addition, there are no deposit or withdrawal restrictions for investors on the Spar protocol, meaning that investors can withdraw their funds from a selected pool at any time, thus significantly reducing counterparty risk.

From a manager’s perspective, Spar protocol offers passive management of investors’ liquidity at promising rates of return. Pool managers are incentivized to be active thanks to fee models that favour those that are active. Low trading fees are capped by $1.40 per trade. An intuitive way to think of the Spar protocol is as a decentralized hedge fund pool, similar to DHedge on the Ethereum network, where isolated liquidity pools of depositor assets rebalance and adjust based on the pool manager’s specific investment strategies.

Once users deposit capital into a pool on the Spar protocol, the manager uses these funds to generate returns based on his/her strategy. Managers can be ranked based on their performance. Since Terra and Mirror power the Spar protocol, investors can gain exposure to various asset classes within specific pools, including equities, commodities, ETFs, etc. Pool managers can even deploy the investor capital as an LP in Defi protocols, thus generating passive returns. For instance, Helmut divides $10,000 of capital between two pools: $5,000 into one pool consisting of only equity exposure to Tesla stocks, $5,000 into a pool that is 50% BTC and 50% yield farming on the Anchor protocol via borrowing UST by minting bLUNA and earning ANC rewards.

The Spar protocol will allow developers to build on top of its platform and induce a design space that permits pools to draw from cross-chain assets and deploy capital in yield farming opportunities, even beyond Terra’s ecosystem. Since the Spar protocol’s team has been involved with Terra from the beginning, they had the opportunity to learn how the Terra team operates and what kind of products fit best into the ecosystem. The Spar protocol does not like the title “crypto project” because it believes that crypto products surpass the phase of appealing only to a crypto audience. Instead, their products need to work for a wider user-set — finding ways to simplify the process is one of their key goals.

Twitter: https://twitter.com/spar_protocol

Void Protocol

The Void protocol provides a service where one can deposit a fixed amount to a contract and then withdraw it to a brand-new wallet with the help of a cryptic phrase, thus making the funds untraceable back to the original wallet. At the same time, by depositing their funds, users can earn a high yield, thus making Void protocol an ideal investment platform with the added layer of privacy that existing defi yield-farming and savings solutions lack.

In return for anonymity, it is recommended that users leave their assets in the contract for a long enough period. To achieve that, the Void protocol will offer many benefits, including fixed yields (Anchor protocol rewards) and pool rewards (22% of the token supply is reserved for it). Although leaving funds in the pool for X amount of time is usually a requirement to achieve anonymity, the protocol offers alternative ways to achieve that. Users can gradually withdraw their deposits, which provides additional flexibility and maximises their returns. The Void protocol will operate in a completely decentralised manner, which offers significant benefits in terms of security, transparency and peace of mind for the users. In time the protocol will also operate under complete control of the Void DAO.

Void plans to have two void anonymity pools, one for LUNA and the other for UST. In addition, users will be able to choose between a set of seizes for the deposit (UST Deposits: 1,000/10,000/100,000; LUNA Deposits: 100/1,000/10,000). This is aimed at increasing anonymity so that when withdrawing the funds to a new wallet, no one can guess (by looking at the withdrawal figure) who the owner of the assets is. The Terra ecosystem has many brilliant projects that, with the help of IBC can in the future integrate and collaborate with the Void protocol, thus providing an additional layer of privacy to those existing solutions, something that many users will increasingly desire. For the tokenomics of the Void protocol, one can refer to the image below.

Given the recent interest and demand for such privacy solutions (e.g., Monero) and the rapidly expanding Terra ecosystem, we believe that Void is an incredible project with plenty of potentials.

Twitter: https://twitter.com/ProtocolVoid

White Whale

The White Whale team created a product that enables small players to profit from arbitraging opportunities that usually would only be available to large whale investors, bots, and technical experts, while also providing additional protection barriers to the Terra UST peg. White Whale achieves that by pooling funds of multiple users together which then benefit from economies of scale and are used to participate in arbitrage opportunities. Arbitrage is the simultaneous purchase and sale of the same asset in different markets to profit from minor differences in the asset’s listed price. Arbitrage exists as a result of market inefficiencies, and it both exploits those inefficiencies and resolves them. In the case of the terra dual token system, arbitrage opportunities occur when the price of UST deviates from its intended 1-dollar peg. Thus, for example, one can burn Luna tokens in exchange for UST when UST<1 and swap Luna tokens to mint more UST when UST>1. In addition, the White Whale protocol also offers high return possibilities when UST=1, thanks to being integrated with the Anchor protocol. 90% of profits are distributed to depositors and 10% to governance and platform fees (government vault and war chest). Each vault will leverage the Anchor protocol, and each vault will buy whale tokens either to burn or distribute them to stakers.

Initially, White Whale will offer arbitrage opportunities between UST and LUNA. However, in the future, it plans to expand the services to other assets built on the Terra ecosystem, including bonded Luna (bLuna), TerraKRW, and mAssets on Mirror. Once there are many vaults on the platform, users will be able to deposit their tokens into the war chest, which will monitor all vaults simultaneously for the best opportunities, enabling a person to arbitrage the entire terra ecosystem from one vault. The White Whale protocol will also offer insurance on deposits, undergo auditing, launch a fair presale event for retail investors and offer incentives to existing users in the form of airdrops. Empowering the community to arbitrage UST and other synthetic assets on Terra will ultimately make the entire Terra ecosystem more secure, robust, and efficient.

Twitter: https://twitter.com/WhiteWhaleTerra

More Information

• Terra Twitter: https://twitter.com/terra_money
• Terra Telegram: https://t.me/TerraLunaChat
• Terra Discord: https://discord.com/invite/e29HWwC2Mz
• Terra Website: https://www.terra.money/

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and Defi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer

This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

12 Promising Terra Powered Protocols was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

This interview is based on a transcript of the recent Qi Podcast episode with Toby Gilbert and Alexander Kjeldaas from the Coinweb team.

Check out the podcast here:

[00:00:00] Archon: Hello guys, welcome to the Qi podcast. It’s a pleasure for me to have you here today on the show.

[00:00:04] Toby Gilbert: you for having us.

[00:00:06] Alexander Kjeldaas: Thank you.

[00:00:07] Archon: Let me also introduce my co-host today, which is CryptoConqueror from Danxia Capital. You already did a deep dive article on Coinweb on our Qi Capital Blog and you have probably seen some of his tweet storms on Twitter already. If not, please give @Danxia_Capital a follow, Toby and Alexander, would it be so kind and give us a short background on each of you personally, your role at Coinweb and also your experience and what got you hooked up with crypto and blockchain technology and technology itself.

[00:00:35] Toby Gilbert: Sure. Toby Gilbert here. I’m the CEO of Coinweb. I spent the past 15 years in the telecommunications sector and for the last six years of that, I have been working alongside Knut Vinger, who is now the CTO of Coinweb. We ended up actually going on a trip away over Christmas and New Years together with a group of friends and work colleagues and he ended up explaining the blockchain space to me over the course of a week in real in-depth ways. He completely got me hooked on it. I think it probably took someone to take their time to be able to explain what the potential of the technology was and really to give a clear picture and understanding. It transformed what I thought I should be doing at the time and no less than a month afterwards, we started to work together on Coinweb.

[00:01:32] Archon: Amazing. Thank you Toby and Alexander, how and when did you join the project?

[00:01:36] Alexander Kjeldaas: I’m Alexander Kjeldaas, I’m the chief architect. I joined a little bit later than Knut, which was there from the beginning. So, my background is I worked on cryptography back in the Linux kernel. So, way back when there was President Clinton in the U.S., restricted exports of strong cryptography from the U.S. I distributed crypto code for Linux kernel when I was at university and that sort of was the beginning of when I got hooked on that. That was way before Bitcoin, but then I also ended up following all these cyberpunk developments on the cryptography mailing list where also Bitcoin was discussed and presented. So, always sort of been there in sort of the space, but I had a long stint of commercial programming. I worked for Google for many years. Search technology and video.

[00:02:40] Archon: Amazing to meet someone who witnessed the development of Bitcoin and crypto from the very first day, right? Many people just joined a few years later and it’s quite an exception that we have somebody that went through all the cyberpunk phase.

[00:02:55] Alexander Kjeldaas: Yes. I did a review of the code actually in the beginnings. I found some thread, race condition issues and stuff like that. So, I got a little bit involved. I have a few commits on the code base at the very start or in the early beginning, but then I sort of left it. And then I came back.

[00:03:14] Then in 2017 I joined the project. I thought it was a very, very cool group of people. That got me really excited and we have a lot of interesting research. Sort of researching the space together and trying to figure out what this really is. How can we solve the problems that we’re trying to solve?

[00:03:36] Archon: Exactly. So, now let’s talk about what you’re trying to solve. Now, the two of you are building at Coinweb and what is the actual problem you’re trying to solve when it comes to blockchain and cryptocurrency space? And when did you first realize that there is actually a problem? How did you experience it and what are the current symptoms that we’re seeing in this space?

[00:03:53] Alexander Kjeldaas: The beginning, it was sort of, we have a kind of simple problem which was names. Having stable names across different blockchains. But, we left that because we dug ourselves down into this and we had a lot of interesting discussions. What we ended up with was, Toby can sort of speak to the commercial side, but on the technology side, it was that in the beginning, there’s sort of been a little bit parallel exploration of this area around the same time has Bitcoin was published there was similar research. There was sort of a parallel research area for outsourcing computations to cloud systems. How can you do that securely? I also did a startup on secure cloud computing at the time, after I left Google and I thought that was sort of a very interesting problem. I didn’t see, sort of, the connection right away, but around 2018 there was this project called Truebit that did some interesting work on Ethereum and what we realized is that we can separate blockchain into two stages. One is the consensus and availability part and the other is the pure computation part. The pure computation part is what’s called, it’s a deterministic process. When we saw that we took that and sort of ran with it. We developed the whole Coinweb technology based on the idea that how can we avoid consensus and sort of non-determinism as much as possible and how far can we get with deterministic computations. We saw that, okay. Our core technology part is the ability to prove deterministic computations and then we saw that we could put that on top of other blockchains and then we could also solve the interoperability problem. I think maybe this is a lot of gobbledy-gook for some people, but part of our approach is also related to some things that the listeners might know about like roll-ups, Truebit and other approaches but we take these deterministic computations further than all these other projects because we let the clients arbitrate who has done the correct computation.

[00:06:27] Archon: Let me get shortly back to the underlying problem you’re solving and perhaps Toby, from a business side, how do you think the fragmentation of the blockchain space that we see right now manifests in what kind of symptoms or what kind of problems?

[00:06:40] Toby Gilbert: You know, I think the way in which it was explained to me and described to me at the end of 2017 when the space was being introduced to me and a parallel was being drawn to the early days of email. When, if you had one email client, you could effectively only send messages within that client to other people on the same platform and you couldn’t send an email between different email clients. Hearing that in 2017 was very difficult to wrap one’s head around it and really to understand how useful that would be. You’ve got a Gmail account and you can’t send an email to a Hotmail account, for example. It was really an alien idea. It was explained to me that’s exactly how blockchains sat. Effectively within their own silos. And if you were to build a project on top of them all to take advantage of that blockchain, then you were tied to that one blockchain and if something happens, if it became too slow, it couldn’t scale, it became too expensive, then you would live or die effectively with the blockchain that you had anchored yourself to. So, the concept of a cross computation platform at the time, which would allow you to build a project in an abstraction layer above the chains which the platform sat and therefore, you could not only take advantage of the functionality of multiple underlying chains, but if there were a problem with the underlying chain, then you can move and you weren’t tied down. So, you would mitigate a lot of your risk. Which is what I spent the past, at that point in time, the past 15 years doing in telecoms where we would have multiple redundancy and routes and fail overs. So, it just made perfect sense as a concept to build an interoperability platform to mitigate those risks as well as delivering the added functionality and feature sets at the time.

[00:08:44] Archon: So, you were able to foresee this problem relatively early because it got worse and worse, right? With the increased adoption of smart contracts, because 2017, we didn’t have a lot,of decentralized apps. Now we have them and now we have them on multiple blockchains so now we feel this issue on a day-to-day basis.

[00:09:03] but Coinweb, you said it’s not a new project. In fact, you’ve been building it for three and a half years but many of us haven’t heard about it before. Why is that?

[00:09:12] Toby Gilbert: Well, it actually goes back to your last question of being able to see the second bounce of the ball and foresee the problems that were going to arise. And at the time, especially in early through to mid 2018, no one, really, or very few people wanted to listen to the problems that we were proposing to solve that had not yet occurred that we were foreseeing were going to happen.

[00:09:38] People were really focused very much on Bitcoin and the price of Bitcoin and the next ICO that was going to launch specifically of the Ethereum platform. Really people were disinterested I think at the time about problems that had not yet occured and they questioned whether or not that those problems would occur I would say. We were doing three things in parallel. We were flying around the world, speaking at events, meeting the community and we were raising or looking to raise monies to build the platform past the small seed round that had been raised. And thirdly, we were building the platform in parallel and we realized that the raising part had hit a brick wall because of the crypto winter that had occurred and we also realized that we were expending far too much energy flying around the world to all of these events and getting very little back from them. So we decided that we would self-fund, get our heads down, build the platform, but also we would look to work with projects that were built in parallel on top of the component, working parts of the platform that we had already built and were building within the short to medium term.

[00:10:57] We began working with two DeFi projects that were building on top of our platform and specifically our ability to issue a cross-chain token. We had a broadcasting system that was able to broadcast transactions down to multiple Bitcoin derived blockchains. We had the beginnings of a working e-wallet and we had the beginnings of a customized Explorer.

[00:11:24] So, we found two DeFi projects that wanted to build. We also invested in them ourselves and we built our platform in parallel with those two DeFi projects. The whole reason for this was that we believed that the best way to prove what we were doing, by way of proof of concept was real customers and real revenue streams.

[00:11:49] So, instead of just having a white paper, that was a promise of what we were going to do and trying to prove that the promise was realizable by advertising a competent team, we wanted to take it one step further which is very much what the traditional model is within technology to get a working MVP out, proved that it can withstand customers and transactions and then look to raise and in our case launch on the public markets. That’s what our strategy was and we went to beta with those two DeFi projects in July of 2020. And we went into live prod at the end of December which I don’t recommend for anyone. The stress levels of it. Of 2020. And between, I think the 22nd of December of 2020 and through til today, with our two DeFi platforms on top of Coinweb, we have handled no less than one and a half million transactions that represent $80 million worth of token sales. Those two defy projects have in excess of 110,000 active customers today that the Coinweb platform handles all of the transactions that pertain to it — writing them down to multiple underlying blockchains. So, only when we had delivered stability for the broadcasting system and the ability to track those transactions via the Explorer did we then look at taking Coinweb to market and looking to raise funds and bring on some fantastic strategic partners that could help us in that next leg of the journey and that’s where we find ourselves today.

[00:13:37] Archon: So, you were a bit too early actually by building the product and this happened to many, many in the past. Not only in technology, but also in other sectors. But you were able to sustain for the bear market. What kind of shape are you right now as a company? Tell us a bit about the team and the people working at it.

[00:13:54] Toby Gilbert: We’re in very good shape at the moment. As I’ve pointed out, we have a considerable amount of transactions hitting our platform every day. They’re stable for nearly just under a year now. The team is 36, I think. I mean, it’s growing at a rate of one to two a week. Out of the 36, we have 18 developers now. All in house. We’re on a constant recruitment drive for new developers. The problem that we run into is every time you employ a new developer, they have to get up to speed and up to scratch with the projects and that takes no less than three months and it also takes the time of the existing developer team. So, it can be quite detrimental. You have to onboard new developers organically and relatively slowly so that it doesn’t interrupt the work on the core at the same time. But we fully expect with operations and with developers to be a team of in excess of 50 people going into the new year of 2022.

[00:15:00] In addition to this, we have, obviously the DeFi projects to whom we’re very, very close and we worked very closely with and we share some resource with, and they have no less than 60 people additionally that work for those projects. I believe that between the two we’re well over 100 today.

[00:15:20] CryptoConqueror: Wow! That sounds incredible. I have a question. Back to interoperability. So obviously, you are not the only ones working on this type of project. Could you give our listeners a high level comparison on the different solution concepts out there and the advantages and disadvantages? Also, if you can please give us an example that you would consider is your closest competitor?

[00:15:45] Alexander Kjeldaas: Yeah. I think that the main thing that, as I mentioned earlier, the main thing that we sort of run with is trying to make as much of our system deterministic as possible. So, we can look at some of the interoperability or most interoperability systems have some sort of say in between chain, let’s say you have a bridge or something, which has its own consensus. You might have an oracle system or something like that. Then you have other systems where you have some sort of thing that needs to be implemented by the chain. Say, you might have a parachain system where the member chains need to adhere to a sort of parent consensus. So, you have sort of two layers of consensus. And you have Cosmos, the IBC protocol, stuff that should be implemented and sort of be internalized. So, the difference that what we’re doing is that we build on top of the existing blockchains. So, Ethereum and Bitcoin, for example, but we don’t create an external extra consensus. So, let’s say you have very, very secure, big, powerful networks, and then you connect them with a consensus chain.

[00:17:19] So, what I believe is the danger or the problem is that that interoperabilty chain becomes then the weakest link. So for example, Bitcoin and Ethereum are very secure networks, but then maybe you put something in between and then that becomes the point of attack.

[00:17:37] You know that there’s an effect called the Lindy effect where it’s like, if something has lived and survived for a very long time, then it will continue living and surviving. If you have consensus on something that was very old, so let’s say a transaction that has a hundred confirmation or a thousand on Bitcoin, it’s very unlikely that it will change and so we’re saying that, okay, if you have two chains and we’re building this neighborhood network, we’re building a network of chains. So, we’re saying that, okay, let’s say this other network that is a neighbor of say Bitcoin, it might not be as safe or secure as Bitcoin, but something that happened, let’s say far back in time on the neighborhood chain, has a pretty low probability of being reorganized or attacked. The trade off that we using is that we say that we can spend more time. We can wait for data but the data that is on the neighborhood chain is still visible to, for example, the Bitcoin chain or a neighbors of Ethereum is still visible to the Ethereum chain. But it takes a while for it to be visible so that the probability of reorganization on the neighborhood chain is insignificant compared to the probability of reorganization of the main chain. And, by the way, we consider all chains. Even if they have so-called “finality”. We consider all chains to be reorganizable because we have examples of chains where they just by decree change stuff regardless of what algorithm they use. So, they might say that, you know, because of our constitution we can change stuff or because of whatever — the consensus algorithm is not the primary thing. So the trade off that we were doing is that that requires time to settle the final state but then on top of that we use information markets that move things really quickly. And those information markets, they are actors that know what the state is on various chains, and then they are basically betting or they are guaranteeing what the state is. Then they take the risk of reorganizations or any change between the time when they state the fact and the time that we have final settlement of state. The reason why we can do the whole thing is that we are using a different proof mechanism. So all chains and basically everything in blockchain is using state routes and merkle proofs and what we are doing is we’re using state routes and Merkle proofs as leaves in a proof mechanism that looks at the whole blockchain as a big computation and that is called the delegation of computation. So, refereed delegation of computation. And that is a proof mechanism that is specifically made for deterministic . Computations. And it has much better properties than consensus based. So, everything that we do are based on something that’s consensus at the lower level, but then on top of that, we do the deterministic computation and you only need one honest node in the network instead of, say 50% or two thirds. That is sort of the difference.

[00:21:00] CryptoConqueror: Yeah. That sounds all very interesting, but also at the same time, quite complex and technical. You haven’t answered the second question I asked, which was basically, if you had to point out one project, which one would you say is doing something that is similar to what you are guys doing? Or let’s say it’s quite similar or in a way similar?

[00:21:26] Alexander Kjeldaas: Yeah. I would like to mention roll-ups. Different roll-ups projects on Ethereum. What they are doing is they are doing also layer two computations. So, they put what’s called call data on the layer one, and then they do computations outside of layer one but then they take the results of those computation and put them back into layer one.

[00:21:51] So the similarity is that we are both based on computation, on data that’s injected into layer one. The difference is that we don’t necessarily inject the result back into the layer one chain because when you do that, you introduce non-determinism into the system. So, then you’re back to deciding what the result of the computation is by voting and you don’t know exactly when the result is ready and you introduce this non-determinism. So, that is what I think is most close to this on the sort of scalability side. On the interoperability side with this sort of delay graph and things like that. I don’t know exactly any project that is along those lines. So, I’m a little bit unsure about that who I would say is the most similar. But, it’s interoperability. So it’s sort of any project that makes it possible to move information between chains would be in the same area, I guess.

[00:23:02] CryptoConqueror: Okay. This sounds also quite interesting and you explained it really well. So, thank you for that Alexander. I have one more question. What benefits will users and protocols have by building on top on Coinweb.

[00:23:16] Alexander Kjeldaas: I think one of the things that you get is this ability to read data or react to data on different blockchains. The way that Coinweb is not a closed system, it doesn’t require the blockchains to adhere to some sort of protocol. So, it’s not closed like some of the multi-chain systems. You can think of it as a Pareto frontier, where you can say, okay, there are blockchains that are really bad but there are a lot of blockchains that are really good and they’re just different in their parameters. Some are more safe, more secure and slower and more expensive and others might be cheaper but also less secure and less tested. It’s not necessarily so that there is one size fits all.

[00:24:06] Although there might be blockchains you should never use. So, the idea of moving from one blockchain to another based on your requirements, I think is quite useful because it depends on the sort of economics and requirements, real-time requirements and stuff like that for your project.

[00:24:25] And then I think, although it sounds complex, what we’re doing. I think what we’re doing is actually a simplification. What we are doing is we are making the proof mechanism that’s in the clients a little bit more complex. It’s like a browser. The difference between a browser that can only show a webpage versus a browser that has JavaScript in the browser. Maybe a little bit more complex, but it’s generic technology. But, on the blockchain side, I think we are simplifying things and we’re sort of clarifying the responsibility of a layer one versus layer two and layer one should be responsible for consensus and availability and span management. And then layer two can do high-performance computations that is basically impossible to do at layer one in a secure manner.

[00:25:17] Archon: But if you look at it from a higher level, what benefits would protocol have from building on it? Like can we also to take a conclusion or a comparison from traditional world where for example, you decide for a cloud wether it’s AWS or Microsoft Azure, you’re kind of locked in if you start to deploy on one. And in your case, if I build a protocol on Coinweb, I can deploy it actually on any chain I want. Correct? And not be completely dependent on, like, let’s say, Ethereum or EVM compatible if I started to build on that.

[00:25:49] Alexander Kjeldaas: Yeah, exactly. So, you can run that on any chain that you want. And then you get this sort of trade off. As I said, this Pareto frontier. You can choose to go, let’s say Ethereum becomes really expensive or Bitcoin, and you can move to another chain because your trade-offs. For example, Bitcoin might become really expensive and then it becomes like to secure for your needs. It becomes the backbone of nation states debt systems. So, like it’s the backbone of Brazil’s national debt. And that’s maybe more secure than what you need for your particular project.

[00:26:26] Maybe you want to move to a cheaper chain in that case, as an example, and you don’t want to lose your state and start all over. You can see all these copycat projects where you have an EVM based systems where you have the same project with different names because they’re on different chains, for example.

[00:26:45] So, that becomes a little easier when you can do that. But also when it comes to computation, I believe that it’s the same argument, basically, that goes for roll-ups. I think this type of technology where you’re doing deterministic computation, but where you’re sort of doing fully deterministic computation is much cheaper. It’s much, much cheaper, because if you look at the cost of running a network, let’s say you have 10,000 nodes, every node needs to validate every transaction in every block. And let’s say you need 51% of the hash power or proof of stake or whatever, some sort of resource or two thirds and then all of those need to be executing everything and that is expensive even if the coin is cheap, just the electricity and the running of that will not scale compared to a system where you only need one honest node. One network with say 10,000 nodes where you need 50 or 67% almost participants, as an example, will never be able to compete with another network that only has 500 nodes and you need just one honest. If you look at the overhead, just like the bare minimum, absolute minimum, like the cheapest possible way that you can run a network. The deterministic computation network will always win.

[00:28:14] Archon: And help our listeners a bit better to understand, like, whom are you targeting right now? Are you talking to DeFi protocols to deploy like their smart contracts on Coinweb or more talking to enterprises to bring their blockchain based use cases on Coinweb because they aren’t sure where to deploy and have you already found those, let’s say customers from your perspective

[00:28:36] Toby Gilbert: We’re running a three pronged approach at this moment in time. The first one has already begun and I referred to it earlier with the two DeFi projects that built on top of us and in an incubator state I may add, where we effectively acquire their customer base become our customer base.

[00:28:57] We’re also engaged in advanced negotiations with no less than three, top 50, by way of market cap, existing blockchain projects and looking at ways, not only how we can launch on their launch pads, but also integrate fully with their chains, use their chains for our transactions and also help solve some of their interoperability problems and pain points that they have.

[00:29:26] And then the third prong approach is big traditional business where we can become their inflection point effectively, their entry point to be able to integrate and use blockchain technology. We’re talking to the likes of car manufacturers, very high profile NFT projects that are looking for cross-chain tokenization which could work off our platform and also we’ll be creating and releasing a wallet as well which will have a cross-chain design set up. An issuance functionality that sits within it. And that’s very much to allow our community to engage with the project directly. To be able to touch and feel what a cross-chain retail platform looks like instead of just really believing in what the project is going to do on a B2B side via an API document, which the majority of our token holders in the first instance will be blind to. We would like to be able to engage with them. So, we’re looking to release that at the end of Q1, beginning of Q2 2022, and we’re already working on that and beginning to code it now as we speak.

[00:30:44] Archon: I mentioned the beginning, obviously, we now more and more level one blockchain getting traction and also having the funds to set out adoption programs in the hundreds of millions in terms of size. How do you think you can still win over let’s say customers of builders for Coinweb competing with those heavyweights and what’s the strategy to do that?

[00:31:05] Toby Gilbert: We’ve already been backed by a number of funds in the space for which we’ve just put out our press releases now, and they have been in the space for a number of years and they are working with, and have invested a number of projects. They’re active investors in those projects.

[00:31:22] And they’re at the moment, the whole group of them, are looking at the top projects that they’ve invested in within their portfolios, and they’re looking at how we’re a right fit for them. And even for their cohort of investment portfolios, we would have the next five years of development work just to be able to integrate and build for them and they represent tens of millions of customers today. So, we really already have our work cut out. I would say the space is still in its infancy and there’s a lot of room for a lot of players here to build and deliver solutions and I suppose ultimately the different approaches that the different solutions offer, are what will drive adoption for those platforms at the end of the day.

[00:32:20] Archon: And you talked before, like, from an end-user perspective, you are building a multi-chain wallet, but what will be the experience for end-users that will interact with Coinweb? Will they actually know that Coinweb is kind of utilized in the end when they use a certain like decentralized application or how can we imagine this?

[00:32:39] Toby Gilbert: Yeah. Absolutely. Outside of us being able to deliver the usual feature sets of any tier one wallets — multiple fiat rails for fiat on-ramping, off-ramping, a prepaid card issuance, that the cross-chain design setup in issuance parts of the wallet is really going to be more about an educational experience.

[00:33:02] So, it’s whereby an end-user can come on, they sign up for the wallet, they submit their KYC, they’re able to buy a stable token which they will hold a balance in before they swap out to other pairs. But when it comes to them wanting to set up and design their own token and then to transfer that token between different Coinweb wallets, they will choose which blockchain that that token will be encoded and recorded in and that will come with different speeds and different fee bases and different trade-offs. And we’re going to explain that to the end user so that they can actually design their own token in a way that suits them best. Which means they have to pick the functionality of the underlying chains to which we connect to to make that happen and that’s going to be a whole, as I said, educational experience so that people can really understand what cross-chain functionality and tokenization is all about. By way of the Coinweb platform itself, they will have to hold a balance of the native token, the CWEBEBeb, to be able to run any of the functionality within that wallet.

[00:34:11] So, they will very much be aware what the platform is being used for. What the native token is being used for. And we aim to make that as simple an experience as possible to try and unravel the complications of blockchain technology so that an end-user can actually have a low touch point and really get to grips with it.

[00:34:34] Archon: And I mean, there are some concerns regarding interoperability solutions and let’s go over a few of those. We already talked a bit about the trade-off between security and transaction speed, where try to solve it in a way that you kind of, not inherit the security weakness of the underlying chain, but perhaps you can double down on this? Let’s take another example that many of our listeners know, like THORChain is, for example, is a cross-liquidity solution between multiple chains. Also like Bitcoin and Ethereum. And back then in May, there has been an exploit based on ERC20 security leak. How could you prevent those things from happening in practice?

[00:35:15] Alexander Kjeldaas: I think the security issue in this ERC20 contract and what you mentioned, that was a bug at the application layer which would be what is running on top of Coinweb. We can’t eliminate those bugs, all of those, because the application layer, the programmer is free to write buggy code, but we do remove quite a few classes of attacks. We’ve removed the consensus layer between the chains which removes a whole class of attacks on say a bridge or an Oracle. There’s also censorship issues. So if there’s any sort of censorship problem where miners collude or sandwich attacks, these kind of things where communication between chains are sort of interrupted, delayed, censored. That’s also eliminated by this neighborhood graph because the state from a neighborhood chain is visible at a fixed point in time. There’s no way to censor it. And then it’s the deterministic computation, as I mentioned, you just need one honest node in a network. Those things that I’mmentioning now are a little bit more at the network layer. So they don’t fully eliminate the sort of THORChain issue that you mentioned. It removes some of the problematic attack.

[00:36:43] Archon: If you think about all the transactions now or smart contract interactions that go for multiple chains, at least like for your layer and let’s say, Ethereum, and we know Ethereum gas fees are extraordinary high right now, what would a user need to pay in terms of fees? Would he need to pay on the Ethereum transaction fees and some kind of Coinweb based transaction fees on top?

[00:37:08] Alexander Kjeldaas: Since we’re running on top of different chains, it’s practical to pay using the CWEB token and also you can have intermediaries that basically compress and make it more efficient to embed data into layer one. But the fees that you’re covering, it needs to cover the cost of the data representing the transaction to get that into layer one and a little bit for the processing on Coinweb. But that is less than what you would pay for the whole transaction processing. For example, if you take UniSwap on Ethereum, the data that I want to swap this token for this other token, that’s a fairly small amount of data. That you need to pay for. You need to pay the gas to get it into the chain. But the whole logic with the liquidity pools and calculating and figuring out who gets what and stuff like that, that you don’t need to pay at the Ethereum level. Then you pay at the Coinweb level which would be much cheaper. So, it’s a little bit in between and it depends on how much computation happens, but on Ethereum where you have, for example, the UniSwap a significant part of the fees that you pay and I think the savings would be very significant.

[00:38:30] Archon: And especially more complex contracts or multiple contracts.

[00:38:34] Alexander Kjeldaas: The more complex the contract, the bigger the savings. Yes.

[00:38:38] Archon: Because you only pay for the information update on the underlying chain but the logic happens on the Coinweb.

[00:38:43] Alexander Kjeldaas: Yes.

[00:38:44] Archon: How long will I have to wait for typical transaction to happen? And let’s say, a transaction that involves like Bitcoin and Ethereum with different settlement times?

[00:38:54] Alexander Kjeldaas: The information propagation between the two chains, it’s not immediate. It will take some time before the Bitcoin shard sees data on Ethereum and vice versa. But given that that will happen eventually, we have the information market on top of that. That means that you have actors that know that the final data or the final result or knowledge about the transaction on Ethereum will be visible on Bitcoin and that means that they can be a middleman and say release a token on the Bitcoin side immediately. Those information market makers, they will basically have different strategies. They can look at the mempool in Bitcoin and Ethereum and act even before there’s any confirmation on either side, depending on how easy it is to replace transactions in the mempool.

[00:39:51] So, depending on what the semantics of the mempool is, and it could even be based on the history of the user and other things, they can act immediately. So, you could potentially have a transaction in the mempool of Ethereum and then information market maker that is basically, immediately issuing a transaction on Bitcoin based on the fact that the Ethereum transaction will be committed. That part is taking a risk. At the point where it’s acting on transactions in the mempool, they are taking the risk of some sort of consensus update of the transaction or censorship but when it’s been committed, they take the risk of reorganization. Still a very small risk because typically the same transactions will come in and the semantics will be the same. After that as time confirmations progresses, they only take the basically, interest.

[00:40:49] They are outstanding for some blocks until the state is committed and visible on the Bitcoin side and then whatever stake they have or similar that will then be released. It depends on the system that’s built on top of it. Could be very fast. Either like the minimum time for one of the transaction to be confirmed in one of the blocks, or it could be maximum of Ethereum and Bitcoin block time or something in between.

[00:41:18] Archon: Okay, based on my needs for my protocol top of it.

[00:41:21] Alexander Kjeldaas: But yeah, based on the risks and what you pay for the information market makers. What risk they’re willing to take based on what you are paying them basically.

[00:41:31] Archon: Okay. Perfect. Thank you.

[00:41:32] CryptoConqueror: I have another question. Obviously, guys, people are interested to know when the mainnet would be ready and also like by mainnet, we mean something like a fully functioning chain. So if you could provide some information, that would be amazing. Thank you.

[00:41:49] Toby Gilbert: We’re going to make an announcement very, very shortly about beta mainnet in the coming week or so. Past that point, the projects that will build on top of the platform in the short term will be all built in a permission state, I would say and that is whilst we build out the core and whilst we also carry on pen testing that the security of the platform constantly, and only when we are really prepared to, will we launch, mainnet in live production allowing third parties to be able to build in a permissionless state on top of the platform. Which is at the point that will be at most risk. By that point in time, we will have a substantial amount of users from the permission projects that we’re currently working with to build on top of us.

[00:42:41] Archon: Let’s look a bit more ahead in terms of your roadmap for the next like 6–12 months and the most important milestones on this raodmap and by the way, please everybody check out like the Coinweb website. I think you have the most roadmap that I’ve ever seen in my life. First, going back to the very start of the project, but also giving a look out for the next many months but perhaps you can deep dive a bit on, on the most important upcoming milestones.

[00:43:05] Toby Gilbert: Sure. We’re looking, as I said before the end of the year, relatively soon to make an announcement about beta mainnet. I don’t want to say too much about that because it’ll go out in the press release that is ready to be sent out. I need to reserve a little bit when it comes to this.

[00:43:22] We’re also in very advanced negotiations with a number of top tier launch pads and exchanges and we’re building together a launch strategy for the token. We also hope to release some news about that imminently. As long as the market withstands. And then past that point, we are connecting to the Ethereum chain, which is a very interesting project, connecting Bitcoin to write trains to the Ethereum chain which Alexander has touched on earlier.

[00:43:54] And then past that point, we will be launching the wallet and the cross-chain tokenization platform. We’re aiming for the end of Q1, beginning of Q2 of 2022. And then past that point, we’ll be making regular announcements about the partner projects that will be building on top of the platform with the end goal of those delivering a significant user base to Coinweb, including revenue streams and millions and millions of transactions for 2022. A culmination of the strategy of the past four years, which has really very much been, as I said when we first started this podcast, that we want to build the product in parallel to building the core so that we are driving adoption in parallel at the whole time as solving these very ambitious, these great problems in a very ambitious way that was solving them and so we’re not just going to be setting out what our ideas are and look to build it over a number of years. You will hear constant news coming from this project which is in parallel to the problems being solved and adoption that we will be proving through the life cycle of the project.

[00:45:19] Archon: Okay. Thank you Toby for this outlook. And Alexander, we talked quickly before about the CWEB token. Let’s get a bit deeper on this. What’s the utility and the purpose of the token and how will the token accrue value?

[00:45:34] Alexander Kjeldaas: The token is partially spam prevention as they do in layer one blockchains. It’s also, you pay to do the work that is done when you’re computing. It’s also the sort of ground token for when you build, let’s say a liquidity pool or staking. You need a token for that so that’s also what the CWEB token is for. Since this is an interoperability system also, and you have different chains, it’s also useful to have one native currency so that users of the system don’t need to have all the tokens that you need to pay the L1 networks.

[00:46:21] Archon: This means whatever chain I’m interacting with, I can always pay all the fees with CWEB so don’t need the underlying token as a user.

[00:46:29] Alexander Kjeldaas: Exactly. That is quite practical to do it like that. Then we also have burn of the token to pay for the execution. That’s also sort of use for the token. Everything you do basically, involves it in some manner. Whenever there’s any resource that needs to be paid for or any spam prevention or incentive that is needed in the system.

[00:46:53] Archon: Okay. Thank you, Alexander and Toby, you mentioned before, like launch pads on existing blockchains. Will you use them for the token launch and when can we expected it?

[00:47:03] Toby Gilbert: We’re going to use a mix of top-tier launch pads and exchanges for a parallel launch. I would say just watch this space. Sooner rather than later.

[00:47:13] Archon: Okay. Great. And yeah, actually we’re already at the end of the podcast and you mentioned watch the space. So how can people inform themselves about what Coinweb is doing, better understand like technology, reading white paper and also like exchange with the community. What are the best sources right now?

[00:47:30] Toby Gilbert: So, the best two sources I would say at the moment are both Telegram and Twitter. We have a number of articles that are going to be published shortly. We have animation videos that are going to be released and these are the two main media channels that we’re using. Two social media channels at the moment for the release of information.

[00:47:47] Please subscribe. Join the channels. Keep a close eye on them. They’re being updated several times a day and really will be the first place that you will learn about any token launches and participations and so on and so forth from both Twitter and Telegram.

[00:48:04] Archon: Yeah. And you can find all this information and the URLs in the description of this podcast. So Toby and Alexander, thank you very much for being our guests today for this Qi podcast episode. Thanks a lot.

[00:48:17] Toby Gilbert: Thank you very much for your time.

[00:48:19] Alexander Kjeldaas: Thank you so much for having me.

[00:48:21] Archon: And also CryptoConqueror, thank you for co-hosting it today and helping out with many of the questions.

[00:48:26] CryptoConqueror: Thank you very much. It has been a pleasure.

About Qi Capital
Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralised finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer
Qi Capital is a strategic investor in Coinweb. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

An Interview with Coinweb about Solving the Challenges of Cross-Chain Computation was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Introduction

The revolution of blockchain interoperability has started, with many projects working day and night to resolve existing issues around cross-chain operability. One of the most overlooked projects in the industry that focuses on blockchain interoperability is Coinweb. The project provides a solution to the increasingly important topic of blockchain interoperability that will lay the path to the future of decentralised finance. It aims to be the first general-purpose blockchain platform to deliver true interoperability for real-world usage.

Blockchain interoperability is like using multiple blockchains as they were one, which means you can easily transfer information between them. As a result, many of the applications that run on one platform today will benefit the industry more if they can simultaneously run on multiple platforms. For instance, blockchain operability can significantly improve user experience as information and transaction can freely flow across blockchains without resorting to costly and time-consuming third-party applications. Once up and running, Coinweb plans to offer A) fast/secure transactions across multiple blockchains B) high-capacity smart contracts enabling the creation of multichain DeFi protocols C) High-performance dApps adaptive to cross-blockchain operability.

Existing Challenges Within the Blockchain Metaverse

One of the main issues the crypto industry faces is the lack of interoperability between different blockchains, which leads to severe consequences. For instance, the solution space for developers is scattered across multiple platforms, making it challenging to utilise it in a decentralised manner without losing important security properties from underlying platforms. Adaptability is also limited, and hence when innovations occur on other blockchains, it is challenging to adopt those new functionalities into existing applications. Furthermore, most blockchains use a sequential execution model, which severely limits their computation output. This leads to high gas fees and congested networks, which significantly affects the execution time. In addition, custom programming languages and non-standard toolchains make it more challenging for developers to build dApps as they have to adjust their skills to the new environment. Finally, accessing and merging blockchain data across multiple chains tends to be quite problematic and introduces additional security concerns that often prevent such endeavours. Coinweb provides a solution to those problems by applying a revolutionary InChain architecture. This architecture makes it possible to take maximum advantage of blockchain interoperability with fewer tradeoffs and retain properties of the underlying chains while drastically increasing the efficiency and usefulness of dApps built on top of those chains. Furthermore, Coinweb uses the WebAssembly runtime environment, allowing programmers to continue using a programming language and toolchain they are already familiar with.

The Key Features of Coinweb

Strong coupling of blockchains

The motivation behind blockchain interoperability is to enable applications to use properties, functionalities and information from multiple blockchains. However, most existing solutions do not allow this yet, or they offer limitations and compromises. On the contrary, the Coinweb approach allows for a high degree of interoperability while minimising tradeoffs. For instance, it is so designed that it can resist damage when some underlying chains fail. Hence a catastrophic failure of one chain will not spread throughout the entire system. Furthermore, reducing application-level interchain transaction costs also limits the risk of complete failure of the underlying chain. Coinweb avoids unnecessary interchain consensus mechanisms by reusing the basic consensus rather than imposing new ones. As blockchain infrastructure and consensus mechanisms are increasingly under attack, interoperability protocols should not be the weakest link.

Uniform deployment across all blockchains

When deploying dApps on the current blockchain platform, developers must overcome the obstacles of custom programming languages and toolchains. Coinweb solves this problem by adopting the WebAssembly runtime environment, a universal language used between on-chain and off-chain code. Hence, it allows programmers to continue using the programming language and toolchain they are already familiar with, for instance, Javascript, C++, Python, etc., which significantly lowers the requirements and threshold for them to write dApps. It also supports standard toolchains and software libraries. Furthermore, smart contract webassembly bytecode can be run on the client-side, backend or even in a web browser, making it easier to develop and integrate dApps.

Parallel execution of smart contracts across multiple chains

Coinweb can execute smart contracts based on index data with the same security attributes as the underlying chain. It also evenly combines information from the blockchain and oracles, and it has similar functions to projects such as The Graph, but with more robust security and better ability to execute code. It offers a more modern data-oriented model for smart contracts when compared to the traditional encapsulation-oriented paradigm, which will help decouple the contract and lead to a more scalable system.

The computational bottleneck caused by the sequential execution of smart contract code has attracted more and more attention. For blockchain technology to be fully adaptable to the mainstream, a horizontally scalable computing model is needed. Coinweb offers parallel execution on single chains and across multiple chains with stronger computing power, which is achieved by decoupling of collation and transaction execution. The execution of the smart contract code within a block is independent of the transaction sequence, which supports the use of massively parallel frameworks, such as map-reduce or GPU. Essentially, every highly scalable system is built similarly.

Indexing of blockchain data with strong security & execution

Coinweb enables users to integrate information between blockchains in a simple and cryptographically secure manner, which is essential for fully utilising interoperability between blockchains. The dApps should have access to the integrated information in the smart contract without jeopardising security.

Reactive smart-contracts

Many use cases will depend on reactive smart contracts, especially in the case of multiple chain applications. For example, a multichain dApp needs to listen and react to events on the underlying chain without adding a certain gas fee to the execution of smart contracts. Coinweb enables applications to do just that. Also, smart contracts on Coinweb can suspend themselves and reactivate later when necessary.

How is Coinweb built?

Coinweb is made up of three layers.

Layer 1 (Availability and Consensus): The blockchain participants agree on a shared view of what data is on the system. Coinweb then borrows this layer to perform certain computations and operations needed for interoperability. In that sense, Coinweb consensus is the union of all the underlying blockchain consensuses.

Layer 2 (Computation): A set of deterministic rules used to interpret and give sense to the data in Layer 1 is applied.

Layer 3 (Application Layer): Used as an interface to interact with users and provide substantial economic incentives and added value that emerges from the ecosystem of the two previous layers.

The Team and the Future

The Coinweb technology has been successfully used since 2020 in a pilot project. It involved using a cross-chain stablecoin called “Starpoints” and integrating it with the payment applications of two handpicked DeFi projects. As of today, the pilot project of Coinweb generated over 100,000 users who have made more than a 1.28million transactions — with a total value of approx. 76 million USD — on the network. After successfully closing a $1.4m seed round in 2018, Coinweb has spent the past three and half years working diligently to create this revolutionary platform. The team has now revealed the massive steps taken so far and its roadmap.

Key Takeaways

• Coinweb created a cross-chain computation platform that enables blockchains to communicate more efficiently with one another.
• It makes the blockchain ecosystem more user-friendly, more collaborative, better connected, and accessible to everyone.
• Coinweb consists of three layers that are interconnected and enable the technology to work effectively.
• The critical ingredient of Coinweb is the InChain architecture that makes it possible to take maximum advantage of blockchain interoperability with fewer tradeoffs, such as sacrificing on security.
• Coinweb adopts the WebAssembly runtime environment, a user-friendly and universal language between on-chain and off-chain code.
• As of today, the pilot project of Coinweb generated over 100,000 users who have made more than a 1.28million transactions — with a total value of approx. 76 million USD — on the network.

More Information

• Coinweb Twitter: https://twitter.com/CoinwebOfficial
• Coinweb Telegram: https://t.me/coinweb
• Coinweb Website: https://coinweb.io/

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralised finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer

This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

Coinweb: The future of Blockchain Interoperability was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Please be aware that this is just a personal analysis based on public information about BNPL Pay. There is no guarantee that the described strategy would play out as described and this article is certainly no recommendation to buy any token. Please also check the disclaimer at the end of the article.

After the initial BNPL IDO a few weeks ago, the BNPL Team is now only a month or so away from releasing the next generation of Decentralized Finance (DeFi), as the team scales decentralized lending products beyond the current boundaries of collateralized lending and tapping into a new frontier of multi-trillion-dollar credit markets — the uncollateralized loans sector.

Like all things in the DeFi ecosystem, this is an experiment. An unsecured lending model based fully on game theory and incentive structures. This is a model where yields are paid to lenders of capital in the form of stable coins and BNPL tokens. In the BNPL Pay protocol, Banking Nodes compete for capital from Lenders, security from Stakers, and yield from Borrowers.

For a more detailed understanding of how this innovative unsecured loans protocol works by merging CeDeFi, please check out the earlier published article and podcast by Qi Capital.

BNPL Token value drivers

The token value of BNPL is driven by supply/demand economics as in all sustainable business models, free of external controls. There are three main demand drivers in the BNPL Pay protocol:

Bonding: To set up a Banking Node, an individual or entity must stake and lock 5M BNPL tokens. Node operators accrue 10% of the interest portion of payments made by borrowers of their pool, as well as a share of staking rewards.

Staking: Anyone that holds BNPL tokens and wishes to delegate them towards a Banking Node can do so. This functions as a soft vouch for a pool operator, in return for 10% of the interest income. Stakers receive their rewards in BNPL tokens, where the interest accrued is automatically converted into BNPL through market buying.

Liquidity Mining: Anyone that holds BNPL tokens can pair it with the equivalent value in ETH and provide liquidity on the Sushiswap BNPL-ETH pool. Liquidity providers collect trading fees from Sushiswap trading activity. Furthermore, users can stake their Sushiswap LP tokens on the BNPL Pay app and receive a share of approximately 100 million BNPL tokens earmarked for liquidity providers.

Governance: A further incentive to lock tokens up via Bonding or Staking is to have a vote in the overall direction of the BNPL Pay protocol. This does not provide a direct economic incentive, but it does provide decision-making in the governance of the BNPL DAO (more details to come). Important parameters for the protocol, such a fee splits, will be set entirely by this DAO.

BNPL Pay Incentive Model:

*A visual representation of the flow of value and incentive structure of the BNPL Pay protocol.

The fundamentals of BNPL are driven by the total value locked in the BNPL Protocol (TVL). TVL is the number of digital assets in the form of stable coins Lenders provide to the Banking Nodes. Let’s dig into an example of how this works.

Supply/Demand-Driven Tokenomics

Above is a simple system with three Banking Nodes, each node with $100m stable coins staked, for a TVL of $300 million. Each node has a different risk profile and as a result, pays out a different interest rate to Lenders. Remember, Stakers share in the slashing penalty under default conditions (and are subject to loss of capital), so depending on the chance of default they will demand higher yields to take on increasing risk.

Under each Banking node, with the assumption of a staker’s expectation in terms of yield’, assuming BNPL price of $0.15 and the bonded tokens are set at 5,ooo,ooo to bond a Banking Node. Now depending on the risk category and the associated staker expectation, a higher TVL is required to attract the same amount of stakers as the risk associated with a given Banking Node’s Borrowers increases.

As the TVL on any node rises, and more capital is available to be lent, more borrowers can be accommodated, generating higher monthly repayments, increasing the overall yield paid to stakers. The growing share of yield available for stakers will mean existing stakers start earning higher returns, incentivizing outsiders to purchase and stake more BNPL to capture some of the growing yield pie.

In this simple mixed model, $300m of TVL would result in approximately 250m BNPL tokens staked and bonded at a fixed price of $0.15. These conservative model assumptions do not incorporate BNPL tokens used for Liquidity Provision or held in external wallets for other reasons.

So as can be seen from above, while Liquidity Mining and bonding are both expected to increase the demand for BNPL tokens, the true driver of value will be the Stakers, who are in turn incentivized by Lenders. Therefore 32.5% of the token supply is set to reward Lenders in the protocol. As Lenders increase, realizing the high sustainable yields, we expect the Stakers to also increase (who either need to hold or purchase BNPL tokens to stake and receive 10% of the yield payable by Borrowers to Lenders). This in turn creates more demand for a fixed supply.

About BNPL

BNPL (Buy Now, Pay Later) is a decentralized lending protocol that puts credit in the hands of those who need it the most: users without capital. BNPL tackles the problems presented by uncollateralized borrowing through a unique design in which a decentralized network of banking nodes services the needs of the industry. With BNPL protocol, anyone can become a lender, and anyone can apply for a loan.

More Information

BNPL Twitter: https://twitter.com/bnplpay

BNPL Telegram: https://t.me/bnplpay

BNPL Website: https://bnplpay.io/

BNPL Whitepaper: https://bnplpay.io/docs/bnpl-white-paper.pdf

About Qi Capital

Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.

Disclaimer

Qi Capital is a strategic investor in BNPL. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.

BNPL Pay Econometrics was originally published in Qi Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.